Massive flooding and disaster like the damage seen in the wake of Hurricane Harvey in Texas can be make-or-break for small businesses. In fact, according to the Federal Emergency Management Agency, some 40 percent of small businesses never reopen their doors after a disaster because the cost of recovery is too great to bear.
What's more, not every small business has flood insurance. According to the Insurance Information Institute, most small businesses are covered under what's known as a business owner policy, or BOP, which does not include flood insurance. That coverage can be obtained through the National Flood Insurance Program or through an excess flood insurance policy with a participating carrier. Commercial policies often include flood coverage.
Business owners that are in a disaster area may also be eligible for financial assistance from the U.S. Small Business Administration.
The SBA has physical disaster loans available, as well as economic injury loans for small businesses, both with loan caps of $2 million. The program has already kicked in for the Houston area as a disaster declaration has been made by President Donald Trump.
"The SBA stands ready to assist Texas businesses and residents for the long-term as they recover from the devastation caused by Hurricane Harvey," the SBA told CNBC in a statement.